Good news for job creation

Finance Minister Nhlanhla Nene says there are early indications that government’s Employment Tax Incentive, which was introduced earlier this year, is attracting buy-in from employers.

Good news for job creation

Tabling his Medium Term Budget Policy Statement in Parliament on Wednesday, the Minister said the tax incentive was good news for job creation and had begun to improve the job prospects for young workers. The incentive was introduced to encourage employers to appoint young workers with little or no work experience.

By August 2014, eight months after it was introduced, about 23 500 employers had claimed the incentive for at least 209 000 employees.

The Minister said this was also an indication that government employment programmes can complement private sector job creation.

“Over the past five years, the Expanded Public Works Programme created four million jobs of short- to medium-term duration.

“The Department of Trade and Industry provides incentives to create jobs in areas such as business process outsourcing and offshoring, which has created 9 000 jobs to date,” Minister Nene said.

This comes against the backdrop of the recent Quarterly Labour Force Survey, which showed that formal employment creation was more moderate.

The unemployment rate remains at about 25% or 35% if discouraged job seekers are included.

The survey indicated that 403 000 jobs had been created since June 2013.

Data also showed that temporary employment associated with the national and provincial elections in May 2014 and growth in public employment programmes accounted for a large share of growth recorded in 2014.